WellPoint defends 39% premium hike in letter to Sebelius

The Associated Press/Washington Post: WellPoint, the parent company of Anthem Blue Cross "is blaming the Great Recession and rising medical costs for its planned 39 percent rate increase for some California customers of its Anthem Blue Cross plan. But Health and Human Services Secretary Kathleen Sebelius isn't buying the explanation proffered in a letter delivered to her" today.

Sebelius questioned the premium increases, pointing to WellPoint Inc.'s $4.75 billion profit reported in the last quarter of 2009. "She also noted that the premium increases are 10 times higher than the increase in national health care costs." The president has pointed to the "premium hikes in California as an ill omen of what will happen around the country if lawmakers fail to enact health care overhaul legislation. 'If we don't act, this is just a preview of coming attractions,' he said at a press conference Tuesday" (Murphy and Alonso-Zaldivar, 2/11).

Los Angeles Times: In the letter to Sebelius, "WellPoint said Anthem's profit margin in California was 'in line with and below that' of competitors in the state. The parent company also said Anthem's individual business in California lost money in 2009 -- although it did not say how much -- partly because the weak economy prompted many customers to switch to lower-cost options." In addition to the Congressional investigation into the premium hikes and subcommittee hearing scheduled for late February, "[t]he California Assembly's health committee also will conduct a hearing. California's insurance commissioner, meanwhile, has called on Anthem to delay its increases while an independent actuary reviews them" (Helfand, 2/11).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.